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Wednesday, June 13, 2012

WASHINGTON – U.S. Senators Claire McCaskill (D-Mo.) and Rob Portman (R-Ohio) today joined together and introduced bipartisan legislation to simplify federal processes for America’s manufacturers, while continuing to guard against Congressional earmarks for pork-barrel projects.

“This bipartisan bill is an important step to strengthen a valuable tool for our job-creators, while ensuring that tool doesn’t turn into a backdoor for allowing earmarks to worm their way back into the legislative process,” said McCaskill, a longtime and outspoken opponent of Congressional earmarks. “We’ve already seen leaders in the U.S. House try to sneak around the earmark ban and nab taxpayer dollars for their own pet projects, so I’m going to stay vigilant while reducing unnecessary burdens for Missouri’s employers.”

“While it is important Washington does away with unnecessary tariffs that increase costs for Ohio businesses and consumers without benefiting any American producers, we need to do it under a better, more efficient system,” Portman said. “Under this measure, we create a transparent, merit-driven process that would allow businesses seeking tariff relief to go directly to the experts at the International Trade Commission. I believe these reforms are the only way we’re going to get important tariff relief through the Congress this year, and I hope Congress will move quickly to provide more certainty for job creators through this merit-based approach.”

In today’s high-tech and globalized economy, American companies need a host of specialized materials, such as certain fibers or chemicals, to build their products. Often, those materials are not produced in the United States, and can only be purchased from overseas. However, tariffs on those specialized materials produced overseas can make them expensive to import, putting American manufacturers at a disadvantage compared to their foreign competitors. In some cases, tariffs on materials make it cheaper to move production overseas altogether—hurting American job-growth.

In cases where a product is subject to a tariff and is unavailable for purchase from an American company, current rules allow companies needing that product to get tariff relief. Congress has regularly passed a “Miscellaneous Tariff Bill” comprised of hundreds of tariff reductions for such products. However, the process requires those companies to get members of Congress to introduce a bill on their behalf for each item on which they wish to suspend tariffs. Once those businesses have convinced a member of Congress to introduce such a tariff-relief bill, their request can be sent to the International Trade Commission (ITC) for review.

McCaskill and Portman have introduced the Temporary Duty Suspension Process Act to streamline the process for duty-suspensions by allowing companies to submit their proposals directly to the International Trade Commission and retaining final approval for Congress. These changes would bolster accountability by lessening the chance for backdoor earmarks—and would improve the process for job-creators, as they would no longer be forced to hire high-paid lobbyists to help get individual legislation introduced at the start of the process. This process change also ensures that bills introduced in Congress do not inadvertently hurt American competitors.

There would be three paths for an article to be considered for a temporary duty suspension or reduction: (1) initiated by the United States International Trade Commission (USITC); (2) via petition from an outside party; or (3) by a referral from a Member of Congress, although no preference could be shown. Through this process, the USITC would review particular articles for approval, allow public comments and objections, take comments from the Administration and Congress, and submit a draft bill containing its recommendations for duty suspensions or reductions to the appropriate Congressional Committees. The bill preserves the role of Congress in the overall duty suspension process by requiring the USITC draft bill to be processed under regular order.

The bill authorizes the new process to be used for three rounds (2012, 2015, and 2018). While it requires a comprehensive review by the ITC of all possible eligible items in 2015 and 2018, an exception is included for the 2012 round so that it can be completed under a truncated timeline.

A copy of McCaskill and Portman’s bipartisan bill is available online, HERE.

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